EddieJayonCrypto
18 Jan 24
The U.S. Securities and Exchange Commission (SEC) case against Coinbase involves a judge in the U.S. District Court for the Southern District of New York deciding whether transactions in a dozen tokens traded on the U.S. exchange should be classified as unregistered securities. Both the SEC and Coin...
The U.S. Securities and Exchange Commission (SEC) case against Coinbase involves a judge in the U.S. District Court for the Southern District of New York deciding whether transactions in a dozen tokens traded on the U.S. exchange should be classified as unregistered securities. Both the SEC and Coinbase agree that the tokens themselves aren't securities, but the SEC argues that each trade amounts to an investor buying into a token ecosystem, while Coinbase contends that these are secondary-market trades in which no contract is in place. The judge's eventual decision will impact the SEC's pursuit of crypto platforms and could potentially influence similar cases against other exchanges. A judge in the U.S. District Court for the Southern District of New York is now deciding whether or not to toss out the Securities and Exchange Commission's case against Coinbase. The ruling will hinge on whether the transactions in any of a dozen crypto tokens should be classified as an unregistered security. The U.S. Securities and Exchange Commission (SEC) case against Coinbase delves into a ton of complexity, but before anything else, a judge has to decide whether transactions in about a dozen tokens traded on the U.S. exchange were securities. Both sides – the SEC and Coinbase – agreed in a Wednesday court hearing that the tokens themselves aren't securities. The SEC lawyers argued that each trade amounted to an investor buying into a token ecosystem in which the purchaser is hoping to share in its gains, and as long as a single one of those transactions could be considered an investment contract, Coinbase has broken securities law. But the company said these are secondary-market trades in which no contract is in place, so they can't be securities. Coinbase is seeking to talk Judge Katherine Polk Failla of the U.S. District Court for the Southern District of New York into throwing out the SEC's accusations that it's breaking the law. Failla decided against making a decision from the bench and didn't explicitly reveal which way she'll rule as she went through 14 pages of questions that challenged the positions of both the regulator and the business over more than four hours. Her eventual decision – expected in the coming weeks, though she didn't hint at a timeline – will join a mixed bag of other recent rulings from her fellow judges in the same court. It'll either reinforce the SEC's pursuit of crypto platforms as unregistered exchanges dealing in unregistered securities, or it'll add to the agency's legal losses on this front and further strengthen the industry's view that the regulator is overreaching. Either way, similar SEC cases against such exchanges as Binance and Kraken could also turn on Judge Failla's view.
Disclaimer: The opinions expressed by the writers at Grow My Bag are their own and do not reflect the official stance of Grow My Bag. The content provided on our site is not intended as investment advice, and Grow My Bag is not an investment advisor. We do not endorse buying or selling any cryptocurrencies or digital assets mentioned in our articles. High-risk investments in Bitcoin, cryptocurrencies, and digital assets require thorough due diligence, and all transfers and trades made are at your own risk. Grow My Bag is not responsible for any potential losses and participates in affiliate marketing.